Venture capital activity is growing in Italy but figures are still very tiny in comparrison with the ones you may see on other international major markets both in terms of invest capital and in terms of investment performance. But the latter is also due to the lack of a significant track record as Italian venture capital history is still to short.
Official data on the issue have been published last week sul tema in Italia lo si ritrova sul fronte delle operazioni nell’ultimo by the Castellanza University in its last Venture Capital Monitor Reporta, while a study about performances has been conducted in a new Report by Kpmg and Aifi (the Italian Association of Private equity, venture capitale and private debt funds) which worked on 74 divestment deals by Italian private equity and venture capital funds in 2015.
Venture capital funds invested 136 billion dollars in the world last year spread on 9,241 deals and divested for a total value of 73 billions, while raised 47 billions in new capital and reported a 1-year Irr of 20.5% (see here a report by Preqin). Italian venture capital funds invested just 120 million euros instead spread on 77 companies and cashed in a 17.6% negative gross pooled Irr (showing the performance of divestments realised in the year, regardless of when the initial investment was made).
Venture capital performance in Italy is however raher variable as in 2014 gross pool Irr was -0.8% and while Italy’s funds investments history is quite new. On average it is actually said that for a venture capital to fully benefit of its investment in a startup company at least 10 years are needed.
Italian venture capital funds’ performance compares with an 18% Irr for buyout deals (from 22% in 2014) and a 51.7% Irr for per replacement deals. On average gross pooled Irr for all private equity and venture capital deals was 17.8% in 2015 with a 61.2% top for top quartile deals.
As for write-offs, early stage deals represent a 63% of total number of write offs (which was 16 out of 74 divestments) while buyout deals represent the msjor stake of divestments in terms of value (74%).
More in detail, year 2015 saw 77 dals by italin venture capital funds, up from 71 deals in 2014 and 66 deals in 2013. while active venture capital operators grew in number to 48 from 33 in 2014and this figure is not including business angels who are co-investing more and more with venture capital funds.
Seed capital investement have been of 0.2 million euros on average while early stage deals reached a 2 million euros average value for an average 33% stake in the target company.